While there are many news that has been coming out of th news lately, there is one that is relatively ignored by all media. On print you can only find it on Reuters prior to this and the source of this article, CSPAN.

What President Obama basically said is that the US would spend 3% of her GDP on Research and Development. This is the kid of news that an American should look out for as it is this kind of move that has far reaching effects into their future.

The reason that President Obama want to do this is rather obvious. Any economist, right-wing Austrian School of Economists or left wing Keynesians would tell you that the most important thing for America to get back us is to restart manufacturing in the United States.

President Obama can do some manufacturing in the short term by investing heavily in green technology today. But that is just for the short term measure. Once the wind farms are up and the geothermal generators are up, there is only so much jobs that they can accommodate and the chances of growth in the future for that industry would not be great in the long term.

So there needs to be a change once in a while that would create more and more jobs. That is where Research and Development comes in. It is something that would be giving investors new markets and ideas to exploit.

Nobody would go against R&D. Many countries take a huge chunk of their GDP out to spend on R&D. It was R&D that eventually allowed America to land the first man on the moon. It is because of R&D by the US Army that we have the Internet today.

But the question is who should spend for it? It is one thing for private companies to fund for it and is another for the government to fund for it. Why is it that the government spend money on something when they cannot make it directly back later?

This really goes back down to the Mathematics that has yet to be shown. Unlike the Keynesian or Austrian school of Economics discussion that I made in the first days of this site, I cannot make even the stand that this could work as there is no Mathematic equation that I can see at all. This was unlike the economic discussion where I said that it could work if the assumptions made by either were right. So the entire view of mine would be at a view-point of logic and I can understand if people disagree.

I feel that unless the US government sells these rights in the future, I really do not see any direct way of earning money after spending 3% of GDP on research. The US government cannot be the main manufacturer as that would put the entire US economy in jeopardy should anything go wrong.

Secondly, where is the private companies coming into this equation? In the end of the day, it would be them who would be making parts and employing people. Are they going to get things cheaply from the US government at the detriment of the US taxpayer? Even if they bought the right, would they then still produce them in overseas factories? That would be coming back to square one again and not solving the problem of lack of manufacturing in this country at all.

Another angle would be this : What kind of R&D would President Obama be doing? Would it be for green energy, something that I said was for the short term, military or a mission to Jupiter? That is something that I feel that the President should be more open about. After all he is not doing this cheaply.

I think the solution would be something that is similar to what some Asian governments do. Give companies a loans for R&D. This would decrease the chances of a loss that the US government would incur though it would still be high risk of loss.

While I disagree with the manner President Obama is trying to do this, I think that it is very positive that at least there is this realization and an attempt to restart manufacturing in USA. I think that this should open a box of ideas had the media concentrated on this.

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